Schedule C — 1225 Inst 1118 (PDF)

Report taxes deemed paid by the domestic corporation under section 960(a) with respect to inclusions under section 951(a)(1). This schedule should be completed by separate category of income and subpart F income group. If there is a subpart F inclusion related to more than one subpart F income group, complete a separate line for each subpart F income group.

An individual (or an estate or trust) that has made an election under section 962 (“section 962 elector”) should also complete Schedule C and report taxes deemed paid.

Column 1a. Enter the name of the foreign corporation whose earnings were included in income by the domestic corporation filing the return.

Column 1b. Enter the foreign corporation’s EIN or reference ID number. See Reference ID numbers , earlier.

Note: Taxpayers no longer have the option of entering “FOREIGNUS” or “APPLIED FOR” in this column. Instead, if the foreign corporation does not have an EIN, the taxpayer must use a reference ID number that uniquely identifies such foreign corporation, using the rules set forth in Reference ID numbers , in the Requirements section, earlier.

Column 1c. Enter the tested unit’s reference ID number (if applicable). See Reference ID numbers , earlier. Complete column 1c only if a CFC has one or more tested units with passive category income. See Regulations section 1.904-4(c)(4).

Note: Taxpayers no longer have the option of entering “FOREIGNUS” or “APPLIED FOR” in this column. Instead, if the tested unit (or the CFC, if applicable) does not have an EIN, the taxpayer must use a reference ID number that uniquely identifies such tested unit (or the CFC, if applicable), using the rules set forth in Reference ID numbers, in the Requirements section, earlier.

Column 2. Enter the year and month in which the foreign corporation’s U.S. tax year ended using format YYYYMM.

Example. When figuring foreign taxes deemed paid in 2025 by a calendar year domestic corporation with respect to inclusions out of E&P not previously taxed for the foreign corporation’s tax year that ended November 30, 2025, enter “202511.”

Code	Subpart F Income Group (Regulations section 1.960-1(d)(2)(ii)(B)(2))
DIRRA	Dividends, interest, rents, royalties, and annuities
NGCPT	Net gain from certain property transactions
NGCT	Net gain from commodities transactions
NFCG	Net foreign currency gain
IEQI	Income equivalent to interest
NPC	Income from notional principal contracts
PILOD	Payments in lieu of dividends
PSC	Personal service contracts
FBCSA	Foreign base company sales income
FBCSE	Foreign base company services income
FIFBC	Full inclusion foreign base company income
INSUR	Insurance income described in section 952(a)(1)
BOYC	Boycott income
BKOP	Bribes, kickbacks, and other payments described in section 952(a)(4)
901J	Income subject to section 901(j) described in section 952(a)(5)

Code	Subpart F Income Group (Regulations section 1.904-4(c)(3)(i) through (iv))
i	All passive income received during the tax year that is subject to a withholding tax of 15% or greater.
ii	All passive income received during the tax year that is subject to a withholding tax of less than 15% (but greater than zero).
iii	All passive income received during the tax year that is subject to no withholding tax or other foreign tax.
iv	All passive income received during the tax year that is subject to no withholding tax but is subject to a foreign tax other than a withholding tax.

Column 5(c). Enter the name of the tested unit. Complete column 5(c) only if a CFC has one or more tested units with passive category income. See Regulations section 1.904-4(c)(4).

Column 3. Enter the applicable two-letter code from the list at IRS.gov/CountryCodes .

Column 4. Enter the applicable three-character alphabet code for the foreign corporation’s functional currency using the ISO 4217 standard.

Column 5(a). Enter the code which describes the subpart F income group classification (as set forth in Regulations section 1.960-1(d)(2)(ii)(B)(2)). Please enter the applicable code from the following list.

Column 5(b). Enter the code which describes the subpart F income group classification (as set forth in Regulations section 1.904-4(c)(3)(i) through (iv)). Please enter the applicable code from the following list.

Instructions for Form 1118 (Rev. 12-2025) 15

Column 6. Enter the total net income in the subpart F income group (identified in columns 5(a) and 5(b)) in the functional currency of the foreign corporation. If there is net income related to more than one subpart F income group, use a separate line for each subpart F income group. In general, the amount entered on a given line will be equal to the total of all amounts in column (xvi) of Schedule Q (Form 5471) for the subpart F income group identified in Schedule C, column 5 for the foreign corporation identified in column 1 and for the category of income with respect to which a Form 1118 and the corresponding Schedule Q (Form 5471) are being completed.

Column 7. Enter the total eligible current-year taxes in the subpart F income group (identified in columns 5(a) and 5(b)) in U.S. dollars.

Note: See the instructions for Schedule G, later, for information on reduction of foreign taxes for failure to furnish information required under section 6038.

Column 8(a). Enter the section 951(a)(1) inclusion attributable to the subpart F income group (identified in columns 5(a) and 5(b)) in the functional currency of the foreign corporation.

Column 8(b). Enter the amount from column 8(a) translated into U.S. dollars at the appropriate exchange rate specified in section 989(b).

Column 10. For each line, multiply the amount in column 7 by the amount in column 9 and enter the result in column 10. This is the tax deemed paid computed under section 960(a).

Example 1. USC is a domestic corporation. CFC is a controlled foreign corporation incorporated in Country X. CFC has two tested units, each of which is a qualified business unit (QBU): QBU1 and QBU2. QBU1 and QBU2 are organized in Country X. The U.S. tax year for USC, CFC, QBU1, and QBU2 ends on December 31. The functional currency of CFC, QBU1, and QBU2 is the “u.” At all relevant times, 1u = $1. For its U.S. tax year ending December 31, 2025, after foreign taxes, QBU1 has 1,000,000u passive category dividend income subject to a less than 15% withholding tax (“QBU1 income group 1”). QBU1 has 1,000,000u passive category dividend income subject to a greater than 15% withholding tax (“QBU1 income group 2”). QBU2 has 2,400,000u passive category dividend income subject to a less than 15% withholding tax (“QBU2 income group”). QBU1 has eligible current-year taxes of $50,000 and $200,000 in QBU1 income group 1 and QBU1 income group 2, respectively. QBU2 has eligible current-year taxes of $240,000 in QBU2 income group. USC has a subpart F inclusion with respect to CFC of which an amount of 800,000u is attributable to each of QBU1 income group 1 and QBU1 income group 2 and 1,920,000u is attributable to QBU2 income group. The country code for Country X is “OC.” CFC, QBU1, and QBU2 have reference ID numbers of 100000, 100011, and 100012, respectively. The applicable three-character alphabet code for the “u” using the ISO 4217 standard is “UUU.” USC completes Schedule C of its Form 1118 with respect to the passive category as follows.

USC makes the following entries on the first of three lines on Schedule C.

Column Entry

1a CFC

1b 100000

1c 100011

2 202512

3 OC

4 UUU

5(a) DIRRA

5(b) ii

5(c) QBU1

6 1,000,000u

7 50,000

8(a) 800,000u

8(b) 800,000

9 0.800

10 40,000

USC makes the following entries on the second of three lines on Schedule C.

Column Entry

1a CFC

1b 100000

1c 100011

2 202512

3 OC

4 UUU

5(a) DIRRA

5(b) i

5(c) QBU1

6 1,000,000u

7 200,000

8(a) 800,000u

8(b) 800,000

9 0.800

10 160,000

USC makes the following entries on the third of three lines on Schedule C.

16 Instructions for Form 1118 (Rev. 12-2025)

Column Entry

1a CFC

1b 100000

1c 100012

2 202512

3 OC

4 UUU

5(a) DIRRA

5(b) ii

5(c) QBU2

6 2,400,000u

7 240,000

8(a) 1,920,000u

8(b) 1,920,000

9 0.800

10 192,000

Example 2. USC is a domestic corporation. CFC1 and CFC2 are controlled foreign corporations incorporated in Country X. The U.S. tax year for USC, CFC1, and CFC2 ends on December 31. At all relevant times, 1u = $1. For its U.S. tax year ending December 31, 2025, after foreign taxes, CFC1 has 1,000,000u passive category dividend income subject to a withholding tax of less than 15% (“CFC1 income group 1”) and 2,400,000u passive category interest income subject to foreign tax other than withholding tax (“CFC1 income group 2”). CFC1 has eligible current-year taxes (including the withholding tax) of $50,000 in CFC1 income group 1 and $240,000 in CFC1 income group 2. USC has a subpart F inclusion with respect to CFC1 of which 800,000u is attributable to CFC1 income group 1 and 1,920,000u is attributable to CFC1 income group 2. For its U.S. tax year ending December 31, 2025, after foreign taxes, CFC2 has 1,800,000u of passive category gain from commodities transactions subject to foreign tax other than withholding tax (“CFC2 income group”). CFC2 has eligible current-year taxes of $450,000 in the CFC2 income group. USC has a subpart F inclusion of 1,440,000u attributable to the CFC2 income group. The country code for Country X is “OC.” CFC1 and CFC2 have reference ID numbers of 100011 and 100012, respectively. The functional currency of both CFC1 and CFC2 is the “u.” The applicable three-character alphabet code for the “u” using the ISO 4217 standard is “UUU.” USC completes Schedule C of its Form 1118 with respect to the passive category as follows.

USC makes the following entries on the first of three lines on Schedule C.

Column Entry

1a CFC1

1b 100011

2 202512

3 OC

4 UUU

5(a) DIRRA

5(b) ii

5(c)

6 1,000,000u

7 50,000

8(a) 800,000u

8(b) 800,000

9 0.800

10 40,000

USC makes the following entries on the second of three lines on Schedule C.

Column Entry

1a CFC1

1b 100011

2 202512

3 OC

4 UUU

5(a) DIRRA

5(b) iv

5(c)

6 2,400,000u

7 240,000

8(a) 1,920,000u

8(b) 1,920,000

9 0.800

10 192,000

USC makes the following entries on the third of three lines on Schedule C.

Instructions for Form 1118 (Rev. 12-2025) 17

Column Entry

1a CFC2

1b 100012

2 202512

3 OC

4 UUU

5(a) NGCT

5(b) iv

5(c)

6 1,800,000u

7 450,000

8(a) 1,440,000u

8(b) 1,440,000

9 0.800

10 360,000